Shenandoah Telecommunications’ (Shentel) Q4 financial results improved by $11.8 million as a result of reduced expenses related to its participation in Sprint Nextel’s prepaid wireless plan sales program. Shentel said Friday the expense reduction “reflects the recalculation of certain expenses, including the cost of handsets, costs per gross addition, and cash cost per user, associated with the program.” The $11.8 million reflects a cash reimbursement for the period between July 2010 and Sept. 30, Shentel said. The expense reduction will be reflected in Shentel’s results for Q4, which ends Monday. Shentel began selling Sprint Nextel’s Virgin Mobile and Boost services in July 2010. Shentel said it “expects that the revised methodology for calculating expense allocable to the Company under the Sprint Nextel prepaid services program will contribute to improved profit margins for its wireless segment in future fiscal periods” (http://xrl.us/bn8bpk).
Synchronoss Technologies bought NewBay, Research In Motion’s (RIM) cloud services subsidiary. Synchronoss said it hopes the completed $55.5 million deal, announced late Thursday, will enhance its cloud-based mobile content services. The acquisition will also enhance Synchronoss’s international presence, said company CEO Stephen Waldis in a news release. NewBay’s European customers include Verizon Wireless co-owner Vodafone, Orange, Swisscom and T-Mobile, Synchronoss said (http://xrl.us/bn8bnk). Synchronoss got a “good deal” on its NewBay purchase, Wells Fargo analyst Gray Powell said in an email to investors. RIM bought NewBay for $100 million in October 2011, shortly after Synchronoss filed a lawsuit against NewBay for patent infringement on its data sync and transfer technology, Powell said. The deal will likely accelerate Synchronoss’s cloud deployment with Verizon Wireless, and likely gives the company a “foothold to up sell cloud services to multiple carriers,” he said. “Note -- [Synchronoss] is already testing cloud services with AT&T and has an early stage relationships with Orange.” Waldis said he believes the deal “will further ensure the success of the significant cloud services launch being prepared at Verizon Wireless, which remains on schedule."
Communications Daily will observe the federal New Year’s Day holiday on Tuesday, Jan. 1. Our next issue will be Wednesday, Jan. 2.
The U.K. government must urgently investigate the sale of hacking software by a British company to repressive regimes, Privacy International said Thursday. In November, the privacy watchdog sent Her Majesty’s Revenue and Customs (HMRC), the department responsible for enforcing export rules and policies, extensive information showing that Gamma International’s FinSpy hacking software was being exported without a license to administrations with “dismal human rights records,” PI said. The Department for Business, Innovation and Skills (BIS) confirmed that such products fall within the scope of the U.K. export control regime, and notified the company, PI said. But despite that fact that FinSpy has been on the market for six years, and that businesses are legally obligated to seek export license classifications, Gamma has only submitted a control list classification inquiry asking whether it needs an export license for the software, PI said. Under the law, Gamma must apply for country-specific licenses in order to sell to customers outside the EU, but BIS confirmed it hasn’t received any applications for such licenses, PI said. Gamma is known to have sold the product to Bahrain and Turkmenistan, where it was used to target dissidents for harassment, arrest and even torture, it said. BIS’s acknowledgement that FinSpy exports should be controlled is welcome, but it’s now up to HMRC to show it can “quickly and effectively lay down the law,” PI Head of Research Eric King said. Although PI asked HMRC for a response within 14 days of its letter indicating whether it had launched or was about to launch an investigation of Gamma, there’s been nothing yet, the organization said. HMRC said it can’t comment on individual cases. Gamma didn’t respond to a request for comment.
Michigan State University Professor Steven Wildman was named chief economist of the FCC Thursday by Chairman Julius Genachowski. He replaces Marius Schwartz, who’s returning to Georgetown University. Genachowski said Wildman “has a stellar record as an economist and has conducted important research on broadband adoption and spectrum management, among other topics.” Wildman holds the James Quello Chair of Telecommunications Studies at MSU and was acting chair of the telecommunications program.
Moody’s gave a B2 rating to a $255 million term loan proposed by Ion Media Networks’ largest shareholder, Media Holdco. Media Holdco owns 87 percent of Ion. Media Holdco plans to use the cash to fund a buyout of its own equity holders, leaving Black Diamond Capital Management as the sole equity owner of the holding company, Moody’s said. Black Diamond is the controlling shareholder of Media Holdco. The holding company should have sufficient liquidity to pay its debt service for the next several years based on Ion’s expected free cash flow prospects, Moody’s said.
Rep. Ed Markey, D-Mass., plans to seek the Senate seat that could be vacated by Sen. John Kerry, D-Mass., if he’s confirmed as secretary of state, Markey’s spokeswoman told us Thursday. President Barack Obama nominated Kerry last week to replace Hillary Clinton to head the State Department (CD Dec 26 p 12). Markey is co-chairman of the Congressional Privacy Caucus and is a member of the House Commerce Committee and its Communications Subcommittee.
The Secret Service’s Cyber Awareness Program -- done through a contract with QinetiQ subsidiary Cyveillance -- has a “limited” privacy impact on individuals, said a privacy impact assessment from the Department of Homeland Security (http://1.usa.gov/W4b3Th). “The privacy impact on individuals is limited since the primary purpose of Cyveillance is not to collect” personally identifiable information (PII), though “the content of interest to the Secret Service that is collected by Cyveillance may contain PII,” the assessment said. The program “collects information using carefully defined parameters, specifically tailored to identify relevant information for official purposes, while also minimizing false positives,” and the agency retains and indexes information needed for investigations and discards any unnecessary information, the assessment said.
The FCC should retain its longstanding policy that requires Section 214 applications from non-WTO member countries to meet the requirements of the effective competitive opportunities test, AT&T told the commission Wednesday (http://xrl.us/bn77uh). The policy behind the test is to encourage non-WTO member countries to open their markets and join the WTO, which is “even more important today in light of the demonstrated role that competition and liberalization play in stimulating investment and use of the networks that are the building blocks of the information based economy of the 21st century,” the telco wrote. AT&T recommended a “modified” test for smaller countries that may not be able to meet the requirements of the current analysis. The commission should retain the “key requirement” of the test, AT&T said: that U.S. carriers have the legal right to obtain a controlling interest in a facilities-based carrier in the country to originate and terminate international traffic in the country. But it should eliminate requirements to show that “an effective regulatory framework exists in the foreign country to develop, implement and enforce legal requirements, interconnection arrangements and other safeguards, and that competitive safeguards exist in the foreign country to protect against anticompetitive practices,” AT&T said. The test should also address the ability to own and access submarine cable capacity landing in these countries, AT&T said.
FairPoint Communications Missouri asked the FCC for a waiver of its rules to reinstate federal high-cost support that was denied from July through December “due to an apparent inconsistency between two of the Commission’s rate floor rules, and an error in complying with the Commission reporting requirements” (http://xrl.us/bn77t7). A waiver would help FairPoint and its customers “avoid the undue hardship” of losing six months of support, which the telco estimates at near $90,000. “This support represents a significant portion of the revenue on which FairPoint relies to continue to invest in its network serving rural Missouri,” the telco said. “Without it, customer service could be put at risk."